Monopoly

1. The monopoly

Old knowledge, which means single seller with many buyers.

1. Technical barriers to entry: new firm must produce at relatively low level of output with a (relatively) high price
2. Legal barriers to entry: Government protection

1.2 The Monopolist’s Production Decision

经典老知识的回顾（详见 ECON2002 Microeconomics I）

$\Pi =p(q)q-C(q)$

$d\Pi /dq=MR-MC$

1.3 Monopoly Pricing

重要但是自己比较陌生的推导：

$d\Pi /dq=\frac{dp}{dq}q+p-MC=0$

$\frac{dp}{dq}q=\frac{dp}{dq}\frac{q}{p}p$

Where $\frac{dp}{dq}\frac{q}{p}=1/\epsilon$

补充：Lerner index is defined by: $L=\frac{P-MC}{P}=-1/\epsilon$

变形：$P=\frac{MC}{1+\frac{1}{\epsilon }}$

Add materials in the course Industrial Economics.:

$P+\frac{dp}{dQ}Q-MC=0$

$P[1+\frac{dp}{dQ}Q/P]-MC=0$

$P(1+\frac{1}{{ϵ}_P})=MC$

2. The cartel and the multi-plant monopoly

Multiplant: 多工厂的

2.1 The Cartel

Cartel: n firms

2.2 The Multi-plant monopoly